Question 1

When firms set prices similar to those of competitors, they are following a strategy of

Accepted Answer

A)   me-too pricing.
B)   copycat pricing.
C)   competitive parity.
D)   market-broadening pricing.
E)   industry-standard pricing.F) B) and E)
G) A) and E)

Question 2

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Accepted Answer

A) True 
 B)False

Question 3

A firm uses customer orientation when it sets its pricing strategy based on how it can add value to its products or services. A "no haggle" pricing policy is a type of ________ pricing strategy.

Accepted Answer

A)   maximizing profits
B)   sales orientation
C)   target return
D)   status quo
E)   customer-orientedF) C) and D)
G) A) and C)

Question 4

Why do manufacturers set manufacturer's suggested retail prices (MSRP)? How do they enforce this practice? Is it legal?

Accepted Answer

Manufacturers set MSRPs to reduce retail...

Question 5

The contribution per unit is

Accepted Answer

A)   price minus total costs.
B)   price minus total variable cost.
C)   price minus variable cost per unit.
D)   total revenue minus total cost.
E)   break-even quantity divided by total fixed costs.F) C) and E)
G) A) and B)

Question 6

Break-even analysis is useful because it allows managers to

Accepted Answer

A)   quantify the relationship between price elasticity and product elasticity.
B)   reposition products based on their break-even positioning revenue.
C)   estimate the quantity they will need to sell at a given price to break even.
D)   determine the relationship between price and quantity demanded.
E)   analyze the different elements contributing to their variable costs.F) B) and E)
G) C) and E)

Question 7

Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

Accepted Answer

A)   substitute products.
B)   purely competitive products.
C)   status quo pricing products.
D)   complementary products.
E)   competitive parity products.F) D) and E)
G) B) and C)

Question 8

Raymond estimates the fixed costs associated with opening a new bank branch are $500,000. He estimates the branch will attract 1,000 new customers who will cost $50/year to service each of their accounts. He also expects to generate $100,000 in fees annually from these accounts. What will be the total cost of opening the new branch and remaining open for one year?

Accepted Answer

Total cost = Fixed c...

Question 9

A high/low pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

Accepted Answer

A) True 
 B)False

Question 10

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

Accepted Answer

A) True 
 B)False

Question 11

Diana owns a boutique specializing in ball gowns. Sales are stable and Diana feels it is time she had a 20 percent increase in her salary. If Diana takes this increase in compensation, it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

Accepted Answer

A) True 
 B)False

Question 12

Unlike product, promotion, or place, price is the only part of the marketing mix

Accepted Answer

A)   that offers the opportunity for an oligopoly.
B)   that is subject to gray market manipulation.
C)   that leads to competition.
D)   that generates revenue.
E)   that is determined by the consumer.F) A) and C)
G) B) and D)

Question 13

Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers draw on

Accepted Answer

A)   a demand curve.
B)   the law of averages.
C)   multiple regression analyses.
D)   target return strategies.
E)   a sales orientation.F) B) and E)
G) A) and C)

Question 14

The key to successful pricing is to match the product with the consumer's perception of value.

Accepted Answer

A) True 
 B)False

Question 15

Gary is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation.

Accepted Answer

A)   profit
B)   sales
C)   competitive
D)   customer satisfaction
E)   product developmentF) None of the above
G) B) and D)

Question 16

Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of ________ on demand for his service.

Accepted Answer

A)   break-even points
B)   the price inelasticity ratio
C)   the income effect
D)   the target return effect
E)   cross-price elasticityF) A) and B)
G) C) and D)

Question 17

What five components should be taken into consideration when a company is developing its pricing objectives?

Accepted Answer

The five Cs of pricing that should be ta...

Question 18

One of the limitations associated with break-even analysis is that

Accepted Answer

A)   it assumes fixed costs are zero.
B)   it cannot adjust for high variable costs.
C)   it tells marketers only what price is needed to break even.
D)   it assumes that there is only one price.
E)   it assumes that demand is extremely inelastic.F) B) and E)
G) B) and C)

Question 19

Historically, prices were

Accepted Answer

A)   the center of attention in almost all marketing strategies.
B)   analyzed and changed constantly.
C)   calculated to minimize contribution per unit.
D)   allowed to vary seasonally as cross-shopping tendencies fluctuated.
E)   rarely changed except in response to radical shifts in market conditions.F) A) and B)
G) D) and E)

Question 20

Which of the following is the most logical example of complementary products?

Accepted Answer

A)   hot dogs and hamburgers
B)   VCRs and DVD players
C)   hot dogs and hot dog buns
D)   Honda cars and Toyota cars
E)   a university and a corporationF) B) and E)
G) B) and D)

Exam 14: Pricing Concepts for Establishing Value

Correct Answer
verified
Total cost = Fixed c...
View Answer

A high/low pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

Correct Answer
verified

Which of the following is the most logical example of complementary products?

Correct Answer
verified

One of the limitations associated with break-even analysis is that

Correct Answer
verified

Unlike product, promotion, or place, price is the only part of the marketing mix

Correct Answer
verified

A firm uses customer orientation when it sets its pricing strategy based on how it can add value to its products or services. A "no haggle" pricing policy is a type of ________ pricing strategy.

Correct Answer
verified

What five components should be taken into consideration when a company is developing its pricing objectives?

Correct Answer
verified
The five Cs of pricing that should be ta...
View Answer

Why do manufacturers set manufacturer's suggested retail prices (MSRP)? How do they enforce this practice? Is it legal?

Correct Answer
verified
Manufacturers set MSRPs to reduce retail...
View Answer

Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

Correct Answer
verified

Gary is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation.

Correct Answer
verified

When firms set prices similar to those of competitors, they are following a strategy of

Correct Answer
verified

The contribution per unit is

Correct Answer
verified

Historically, prices were

Correct Answer
verified

The key to successful pricing is to match the product with the consumer's perception of value.

Correct Answer
verified

Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of ________ on demand for his service.

Correct Answer
verified

Diana owns a boutique specializing in ball gowns. Sales are stable and Diana feels it is time she had a 20 percent increase in her salary. If Diana takes this increase in compensation, it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

Correct Answer
verified

Break-even analysis is useful because it allows managers to

Correct Answer
verified

Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers draw on

Correct Answer
verified

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

Correct Answer
verified

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Correct Answer
verified

Exam 14: Pricing Concepts for Establishing Value

Correct AnswerverifiedTotal cost = Fixed c...View AnswerShow Answer

A high/low pricing strategy relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.

Correct AnswerverifiedShow Answer

Which of the following is the most logical example of complementary products?

Correct AnswerverifiedShow Answer

One of the limitations associated with break-even analysis is that

Correct AnswerverifiedShow Answer

Unlike product, promotion, or place, price is the only part of the marketing mix

Correct AnswerverifiedShow Answer

A firm uses customer orientation when it sets its pricing strategy based on how it can add value to its products or services. A "no haggle" pricing policy is a type of ________ pricing strategy.

Correct AnswerverifiedShow Answer

What five components should be taken into consideration when a company is developing its pricing objectives?

Correct AnswerverifiedThe five Cs of pricing that should be ta...View AnswerShow Answer

Why do manufacturers set manufacturer's suggested retail prices (MSRP)? How do they enforce this practice? Is it legal?

Correct AnswerverifiedManufacturers set MSRPs to reduce retail...View AnswerShow Answer

Bill is a yacht broker in the southeastern United States. For years he has had difficulty selling large yachts locally because there were few places to dock these boats. Yachts and spaces to dock them are an example of

Correct AnswerverifiedShow Answer

Gary is the marketing manager for an automobile dealership. His boss tells him the firm's primary goal is to increase its local market share from 15 to 30 percent. His firm is using a ________ orientation.

Correct AnswerverifiedShow Answer

When firms set prices similar to those of competitors, they are following a strategy of

Correct AnswerverifiedShow Answer

The contribution per unit is

Correct AnswerverifiedShow Answer

Historically, prices were

Correct AnswerverifiedShow Answer

The key to successful pricing is to match the product with the consumer's perception of value.

Correct AnswerverifiedShow Answer

Rodi owns Hallman's auto repair service. He has observed over the years that customers keep their high-mileage cars longer when the economy is doing poorly, creating demand for his maintenance and repair service. Rodi has observed the impact of ________ on demand for his service.

Correct AnswerverifiedShow Answer

Diana owns a boutique specializing in ball gowns. Sales are stable and Diana feels it is time she had a 20 percent increase in her salary. If Diana takes this increase in compensation, it will decrease the break-even quantity of gowns she needs to sell on a monthly basis.

Correct AnswerverifiedShow Answer

Break-even analysis is useful because it allows managers to

Correct AnswerverifiedShow Answer

Customers must see value in a product or service before they are willing to exchange time or money to obtain it, but not all customers see the same value in a product. To analyze how many units will be sold at any given price point, marketers draw on

Correct AnswerverifiedShow Answer

When a firm has a particular profit goal as its overriding concern, it will use target return pricing to meet the profit objective.

Correct AnswerverifiedShow Answer

Because consumers are generally more sensitive to price increases than to price decreases, it is easier to lose current customers with a price increase than it is to gain new customers with a price decrease.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Total cost = Fixed c...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The five Cs of pricing that should be ta...
View Answer

Correct Answer
verified
Manufacturers set MSRPs to reduce retail...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

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